This paper addresses a range of serious problems involving higher education in Ethiopia. In spite of increased enrollment in higher education, educational quality is deteriorating afterwards. Thus, this paper tried to assess the role of social infrastructure in education for economic development of the country and examined major critical problems in higher education of Ethiopia such as higher education finance, curriculum development, and instructor’s career development. Primarily the paper discusses the fundamental contributions of social infrastructure in higher education to economic development; namely development of human capital, improved health, life expectancy, increased productivity, and personal saving, then, the paper examines critically higher education in three regimes of Ethiopia (Emperor Regime, Derg Regime and EPDRF/current government). Thus, four main questions were raised during this research: 1. what are the antecedents of Ethiopia Higher Education System under three regimes? 2. what are the current and emerging higher educational needs in Ethiopia economic development? 3. what are the role of private sector in addressing the gaps in higher education of the country and its adverse effect on quality issues. 4. what improvements are needed in higher education system of Ethiopia? Documents from Ministry of Education in Ethiopia, Natioanl Statistical Abstracts, and Reports form the World Bank and other recognized institutions were used in addition to recent empirical researches conducted in the country. In doing so, care had been taken to reduce prejudiced reports by involving different reports from multiple sources. The paper concludes that during emperor system higher education enrollment was among the very lowest in the world, therefore, the skilled human resource available to guide development were little, but the cost was very high. During the Derg regime where ideological change in the system penetrated in to higher education resulted with lack of large amount of resources to support higher education; the war inside and outside the country diverts resources from the sector. The main purpose of this paper is not only to discuss the problems and issues of higher education in the past, but it also investigates the influence that the current expansion of higher education has on the finance, staff, and other resources for the quality of education. The paper concludes that higher education in Ethiopia are finance by government, outdated curriculum and lagging behind the standard regarding qualified staff. Finally, it provided inevitable solutions if the country wants to gain well record in quality of education as well.
Keywords: Social-infrastructure, Higher-Education, Ethiopia